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interest rate fallacy

Do Bonds Accurately Price Inflation? Since Before Any of Us Were Born

By |2021-10-22T18:15:00-04:00October 22nd, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Many, likely the vast majority believe that the recent wave of consumer price increases is going to stick around. It’s already painful and even if it isn’t inflation, they’re thinking, it soon will be. Maybe not 1970’s bad, not yet, at the very least something like then.The bond market doesn’t just disagree, it keeps doing so vehemently. Nothing new, bond [...]

You Don’t Have To Take My Word For It About Eliminating QE

By |2021-10-20T19:33:04-04:00October 20th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

You don’t have to take my word for it. QE doesn’t work and it never has. That’s not just my assessment, pull out any chart of interest rates for wherever gets the misfortune of having been wasted with one of these LSAP’s. If none handy, then just read what officials and central bankers write about their own programs (or those [...]

Until This Changes, Forget Inflation: Banks Bought Epic Amounts of Safe, Liquid Assets in H1 ’21

By |2021-10-08T20:39:23-04:00October 8th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The first half of 2021 was inundated with government helicopters, more QE’s, and then CPI’s put up with guarantees the “inflation” was going to continue for a long time. Jamie Dimon, JP Morgan’s often hapless CEO, proudly declared US Treasuries beyond the touch of any 10-foot pole. With the economy on fire, he “reasoned”, who would ever want safe and [...]

Behind The Inflation Curtain (Europe)

By |2021-07-26T18:18:58-04:00July 26th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

When the ECB’s leadership presented their first QE to the assembled media on March 5, 2015, there was a lot of the usual corporate-speak. It sure wasn’t fedspeak, the purposefully obfuscating wordsmithing of the kind made infamous by Alan Greenspan. No, on this occasion, to the contrary, Mario Draghi, the ECB’s President, wanted to be perfectly clear in what he [...]

No Reason To Toss Out Low Rates In The Inflation Debate: The Repo Rat Rate Fallacy

By |2021-05-24T17:49:19-04:00May 24th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

A dead rat would’ve easily explained the foul odor, though it wouldn’t have ended the matter. The smell was real, the cause still yet to be identified in the mainstream view. For the bond market, anyway, it was a process of discovery which began with an unexpected stench of something much bigger and more profound than any single or simple [...]

TIPS for Secretary Yellen

By |2021-05-04T19:39:18-04:00May 4th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

As Ben Bernanke has another one of his myths begin the process of falling apart, his successor Janet Yellen chimes in today with yet another reminder why that must be. Though Yellen now sits in an even bigger chair, so to speak, having failed upward to Treasury, this one’s the sort of thing upon which a Federal Reserve Chairman would [...]

Proper Skepticism Even As Aussies Experience A Proper Rout

By |2021-03-01T19:45:57-05:00March 1st, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Australia, by contrast, now that’s becoming a proper bond rout. While the country’s central bank clings to its yield curve “control” fantasy, the long end of the AGS curve has gone true vertical. Yielding as little as 1.04% just four weeks ago on January 28, the rate for that country’s 10-year government bond has added an impressive 83 bps in [...]

Meanwhile, Outside Today’s DC

By |2020-11-03T17:34:17-05:00November 3rd, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

With all eyes on Washington DC, today, everyone should instead be focused on Europe. As we’ve written for nearly three years now, for nearly three years Europe has been at the unfortunate forefront of Euro$ #4. We could argue about whether coming out of GFC2 back in March pushed everything into a Reflation #4 – possible - or if this [...]

Accusing the Accused of Excusing the Mountain of Evidence

By |2020-08-03T17:53:25-04:00August 3rd, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Why not let the accused also sit in the jury box? The answer seems rather obvious. While maybe the truly honest man accused of a crime he did commit would vote for his own conviction, the world seems a bit short on supply of those while long and deep offering up practitioners of pure sophistry in their stead.These others when [...]

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